Karnataka High Court

Sri Vinod M vs Sri K V Srikanth on 22 October, 2024

                                                           -1-
                                                                   NC: 2024:KHC:42486-DB
                                                                    RFA No. 821 of 2016




                                   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                                        DATED THIS THE 22ND DAY OF OCTOBER, 2024

                                                        PRESENT
                                  THE HON'BLE MR JUSTICE SREENIVAS HARISH KUMAR
                                                           AND
                                         THE HON'BLE MR JUSTICE UMESH M ADIGA
                                        REGULAR FIRST APPEAL NO. 821 OF 2016 (SP)
                                 BETWEEN:

                                 SRI. VINOD M.,
                                 S/O LATE SRI. MAHONLAL,
                                 AGED ABOUT 43 YEARS,
                                 RESIDING AT NO.207,
                                 III CROSS, CHIKKANNA GARDEN,
                                 SHANKARPURAM,
                                 BANGALORE-560 004.                       ...APPELLANT

                                 (BY SRI.P.D.SURANA, ADVOCATE)

                                 AND:

                                 1. SRI K.V.SRIKANTH,
                                    AGED ABOUT 56 YEARS,
Digitally signed by KORLAHALLI
BHARATHIDEVIKRISHNACHARYA
Location: HIGH COURT OF
KARNATAKA
                                 2. SRI K.V.MANJUNATH,
                                    AGED ABOUT 54 YEARS,

                                   BOTH ARE SONS OF
                                   SRI K.H.VISHWANATH,
                                   RESIDING AT
                                   SRI VENKATESHWARA COMPLEX,
                                   NO.52, A.M.LANE,
                                   B.V.K.IYENGAR ROAD
                               -2-
                                         NC: 2024:KHC:42486-DB
                                           RFA No. 821 of 2016




  CROSS, CHICKPET,
  BENGALURU-53.
                                                ...RESPONDENTS

(BY SRI.K.RAVINDRANATH, ADVOCATE FOR
    SRI S.V.SHASTRI, ADVOCATE )

     THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION
96 OF CPC, 1908, AGAINST THE JUDGMENT AND DECREE
DATED 29.01.2016, PASSED IN OS.NO.7688/2003 ON THE FILE
OF THE XI ADDITIONAL CITY CIVIL JUDGE, BENGALURU,
DISMISSING THE SUIT FOR SPECIFIC PERFORMANCE.


    THIS   APPEAL,   HAVING  BEEN    RESERVED FOR
JUDGEMENT, COMING ON FOR PRONOUNCEMENT THIS DAY,
UMESH M. ADIGA, J., PRONOUNCED THE FOLLOWING:


CORAM:      HON'BLE MR JUSTICE SREENIVAS HARISH KUMAR
            and
            HON'BLE MR JUSTICE UMESH M ADIGA


                      CAV JUDGMENT

(PER: HON'BLE MR JUSTICE UMESH M ADIGA)

This appeal is by the plaintiff challenging the

judgment and decree dated 29.01.2016, passed by the

learned XI Addl. City Civil Judge, Bengaluru, (for short

`trial Court'), in O.S.No.7688/2003.

2. We refer to the parties as per their ranks before

the trial Court.

NC: 2024:KHC:42486-DB

3. It is the case of the plaintiff that defendant Nos.1

and 2 are the owners of suit property bearing No.52,

situated at Venkateshwara Complex, A.M.Lane,

B.V.K.Iyengar Road, Bengaluru. They intended to sell the

said property and were searching for the proposed buyers.

Plaintiff also intended to purchase the suit property, who is

a tenant in the said property. Both parties held discussion.

Defendants agreed to sell the suit property for a sum of

Rs.18 lakhs. Plaintiff agreed to pay the earnest money of

Rs.1 lakh and five years time was granted to execute the

sale deed since some portion of the suit property was in

the possession of the tenants. The defendants agreed to

receive the balance amount of sale consideration at the

time of execution of the sale deed. Defendants also agreed

to handover the possession of the suit property at the time

of execution of sale deed. Both plaintiff and defendants

executed an agreement of sale dated 26.10.1998 and it

was registered on 27.10.1998. At the time of execution of

the said agreement of sale, plaintiff paid Rs.1 lakh through

NC: 2024:KHC:42486-DB

cheque as earnest money and defendants encashed the

said cheque.

4. It is further case of the plaintiff that defendants

borrowed Rs.7 lakhs from one Mr.C.Ashok Kumar i.e.,

Rupees Four lakhs on 15.07.1998 and Rupees Three lakhs

on 09.08.1998. While obtaining the said loan, defendants

had executed on demand promissory notes, payment

receipts and blank signed cheques in favour of said Ashok

Kumar. After execution of the agreement of sale,

it appears that the said Ashok Kumar insisted defendants

to pay the outstanding amount borrowed from him.

Defendants requested plaintiff to pay the outstanding

amount to Ashok Kumar. Plaintiff, defendants and said

Ashok Kumar entered into a tripartite agreement dated

28.10.1998 and under the said agreement, defendant

Nos.1 and 2 requested the plaintiff to pay the amount

outstanding to the said Ashok Kumar out of the balance of

sale consideration. According to the said tripartite

agreement, plaintiff paid totally an amount of Rs.11 lakhs

NC: 2024:KHC:42486-DB

to the said Ashok Kumar out of the balance of sale

consideration.

5. On 04.12.1998 at the request of defendants,

plaintiff paid Rs.1 lakh through cheque bearing

No.502894, drawn on Amanath Co-operative Bank Ltd.,

towards balance of sale consideration. In all, as on the

date of filing of suit, an amount of Rs.13 lakhs was paid

by the plaintiff to the defendants, including Rs.11 lakhs

paid on their behalf to the said Ashok Kumar. Plaintiff

repeatedly requested the defendants to execute the sale

deed, but defendants went on postponing to execute the

sale deed. Defendants did not comply with the terms of

the agreement of sale and failed to execute the sale deed

by receiving the balance of sale consideration.

6. Plaintiff was always ready and willing to perform

his part of the contract by keeping the balance of sale

consideration. Since the defendants did not evict all the

tenants from the portion of suit property and obtained

clearance certificate from the Income-tax department, sale

NC: 2024:KHC:42486-DB

transaction was not completed. Plaintiff made several

requests to the defendants to execute the sale deed,

however they did not come forward to do so. With these

reasons, plaintiff prayed for decreeing the suit.

7. The defendants contended that they admit

execution of Ex.P-1, but according to them, it was not an

agreement of sale, but an acknowledgement for obtaining

loan of Rs.1 lakh from plaintiff to meet their financial

necessities and development of their business. They

denied the execution of tripartite agreement between

plaintiff, Ashok Kumar and defendants. They also disputed

taking of loan from said Ashok Kumar. They denied the

receipt of additional sum of Rs.1 lakh from plaintiff vide

cheque dated 04.12.1998. According to their contention,

plaintiff was a tenant in the suit property. He created

Ex.P-1 to gulp their property. The suit property is the only

property belonging to the defendants and they have been

residing in a portion of it. In one of the shops, they are

NC: 2024:KHC:42486-DB

running business. If suit is decreed, they would put to

untold hardship and hence, prayed to dismiss the suit.

8. From the rival contentions of the parties, the trial

court framed the following issues:

1) Whether the plaintiff proves that the defendants were agreed to sell the suit schedule property for Rs. 18 lakhs and executed an agreement of sale dated 26.10.1998 by receiving an advance amount of Rs. 1 lakh?

2) Whether the plaintiff proves the payment of further advance of Rs.1 lakh on 4.12.1998?

3) Whether the plaintiff proves that the defendants entered into tripartite agreement on 28.10.1998 with him and one C.Ashok Kumar agreeing to treat the loan amount of Rs.11 lakhs paid to Sri.C.Ashok Kumar as part sale consideration of the agreement of sale dated 26.10.1998?

4) Whether the defendants proves that the plaintiff got executed the agreement of sale dated 26.10.1998 and received two on demand promissory note, consideration receipt along with 5 blank signed cheques drawn on Amanath

NC: 2024:KHC:42486-DB

Co-operative Bank as a security to the loan of Rs.1 lakh?

5) Whether the plaintiff proves that he has always been ready and willing to perform his part of contract?

6) Whether the plaintiff is entitled the relief of specific performance of contract?

7) To what order or decree?

9. During the trial of the case, plaintiff examined

PW.1 and PW-2 and got marked Exs.P-1 to P-9.

Defendants examined DW-1 and got marked Ex.D-1.

10. The trial Court after hearing both the parties

and appreciating pleadings and evidence on record,

answered issue Nos.1 to 3 and 5 in the negative, issue

No.4 in the affirmative and by the impugned judgment,

dismissed the suit. Being aggrieved by the same, the

plaintiff preferred this appeal on the grounds mentioned in

the appeal memo.

NC: 2024:KHC:42486-DB

11. We have heard the arguments of learned

counsel for both the parties and perused the materials

placed on record.

12. The learned counsel for the appellant submits

that Ex.P-1 was executed on 26.10.1998 and it was

registered on 27.10.1998. The defendants admit the

execution of Ex.P-1, but their contention is that it was a

document of security for obtaining loan from the plaintiff.

The trial Court ignoring the oral and documentary

evidence produced by the plaintiff, accepted the defence of

the defendants contrary to the contents of registered

agreement of sale. The defendants are not supposed to

lead the evidence contrary to the contents of the

documents. The trial Court has not considered the same.

13. The learned counsel for the appellant has further

submitted that defendants obtained loan of Rs.7 lakhs

from one C.Ashok Kumar and said Ashok Kumar insisted

the defendants to repay the amount lent to them. The

defendants did not have money to pay him. Therefore,

- 10 -

NC: 2024:KHC:42486-DB

they requested the plaintiff to pay the outstanding amount

to said Ashok Kumar. Accordingly, tripartite agreement

was executed. In the cross-examination of PW-1, he

admits their signatures on Ex.P-2. The said admission was

also not considered by the trial Court. The plaintiff paid

Rs.2 lakhs to the defendants by way of cheque and that is

admitted by PW-1. The defendants admit receipt of

Rs.1 lakh from the plaintiff. They deny receipt of

Rs.1 lakh through cheque on 04.12.1998.

14. The learned counsel for the appellant further

submits that plaintiff and his brother are in occupation of

two of the shop premises situated in the suit property.

There are several shop premises in the said suit building

and few shops were leased out to different persons which

is not in dispute. To secure the actual possession of the

property from the tenants, five years time was granted to

conclude the sale transaction; these facts are not properly

appreciated by the trial court. The trial court has made

much about non-examination of said Ashok Kumar, which

- 11 -

NC: 2024:KHC:42486-DB

was not necessary in view of admission of DW-1 about

execution of Ex.P-1 and Ex.P-2.

15. Learned counsel for the appellant further

submitted that it is not in dispute that plaintiff had

sufficient source of income and he was always ready and

willing to perform his part of the contract. On the

contrary, inspite of several requests, defendants were not

ready to execute the sale deed by receiving the balance

amount of sale consideration. The defendants have not

led any reliable rebuttal evidence to disprove the case of

the plaintiff. The trial Court has not appreciated the case

of both side properly and erroneously dismissed the suit,

which needs interference by this Court. With these

reasons, he prayed to allow the appeal. In support of his

contentions, learned counsel for the appellant has relied

upon some of the judgments.

16. Learned counsel for the respondents/defendants

submits that Ex.P-1 was executed for security to the loan

of Rs.1 lakh obtained by the plaintiff. The contents of

- 12 -

NC: 2024:KHC:42486-DB

Ex.P-1 also reveal that it was a loan transaction. The

tripartite agreement at Ex.P-2 is not reliable. The relevant

witnesses to the said document are not examined. If

defendants were already indebted to said Ashok Kumar

and he was pressing hard for repayment of the amount,

then defendants should have insisted the plaintiff to pay

the amount to them, so that they could pay to said Ashok

Kumar to clear-off the debt. However, a different

document was said to be executed by the defendants

without any reasons and there is no whisper in Ex.P-1 in

this regard, which creates doubt in the case of the

plaintiff.

17. The sale agreement was said to be executed on

26.10.1998 and the suit was filed during the year 2003

i.e., nearly after five years. Therefore, the contention of

the plaintiff that he was always ready and willing to

perform his part of the contract is not proved. It is the

only property of the defendants. They are residing in the

portion of said building. They are running business in one

- 13 -

NC: 2024:KHC:42486-DB

of the property. The value of the building was more than

Rs.50 lakhs as on the date of Ex.P-1. If appeal is allowed,

then much hardship would cause to defendants and they

will be on streets along with their family. The learned trial

Judge has considered all these facts and came to a right

conclusion. There are no reasons to interfere in the said

findings. With these reasons, he prayed to dismiss the

appeal.

18. From the contentions of the parties, the following

point emerges for our determination:

(i) Whether the learned trial Judge is justified in holding that Ex.P-1 was executed as document of security for the loan of Rs.1,00,000/- obtained by defendants?

(ii) Whether learned trial Judge is justified in holding that plaintiff has failed to prove the payment of Rs.11,00,000/- towards sale transaction to Ashok Kumar and execution of tripartite agreement dated 28.10.1998?

(iii) Whether the learned trial Judge is justified in holding that plaintiff has failed to prove that he was always ready and willing to perform his part of agreement?

- 14 -

NC: 2024:KHC:42486-DB

Our finding on above points is in the negative for the

following reasons:

19. Following facts are not in dispute.

That defendants are absolute owners of suit

property; that three-storied building was built on the suit

land; That defendants reside in the portion of building at

second and third floor; That plaintiff and his brother

occupied two of the shops in the suit property as tenants;

That defendants have also occupied one of the shops of

suit property and running business of electrical articles;

There are shops in the ground, first and part of second

floor and two shops are let out to others; That suit

property is situated in market place. Hence, discussion of

these facts are not necessary.

20. From the evidence of both side, execution of

Ex.P-1-registered agreement of sale (AOS) is not in

dispute and receipt of Rs.1 lakh by the defendants by

executing Ex.P-1. Plaintiff contends that it was executed

with an intention to sell the suit property. But defendants

- 15 -

NC: 2024:KHC:42486-DB

contend that it was executed as a security to the loan of

Rs.1 lakh obtained by the defendants to improve their

business. That is moot point in this case. PW-1 in his

evidence says that defendant No.2 is serving in his shop.

He denies suggestions of defendants that for the purpose

of improvement of their business, as well as to meet

marriage expenses of their younger sister, they obtained a

loan of Rs.1 lakh and in that regard, at the instance of the

plaintiff, Ex.P-1 was executed. As observed by the learned

trial Judge, in his cross-examination at para-24, PW-1

admits that "Ex.P-1 was executed by the defendants as

they have obtained money from him to improve their

business."

21. In Ex.P-1 at page No.2, it is mentioned as

"Whereas the Vendors having acquired right, title and

interest over the Schedule Property have agreed to

execute this agreement in order to "raise finance for

family necessity and legal benefit" and also to

- 16 -

NC: 2024:KHC:42486-DB

overcome commitments in their independent business of

their own, ..............".

22. It is not in dispute that defendants are running a

shop in electrical items under the name and style "Srikant

Electricals" in the suit property. It is also not the case of

the plaintiff that defendants are running their shop in

different property. If they decided to sell the very same

property, then the question of improving the business of

their shop does not arise. It is also the evidence of PW-1

that for the purpose of improving their business, they

agreed to sell the property. This fact leads to an inference

that they had not intended to sell the property.

23. The plaint schedule shows that suit property is

situated in the market place, as well as center place of

Bengaluru. In the cross-examination of PW-1, he admits

that suit property is situated in a commercial area. It

consists of ground, first, second and third floor. PW-1 in

his cross-examination denies the suggestion that as on the

date of Ex.P-1, its worth was more than Rs.50 lakhs.

- 17 -

NC: 2024:KHC:42486-DB

As per Ex.P-1, as well as plaint averments, the total area

of the suit property is 19.6 ft. East to West and 33 ft.

North to South. It consists of land, as well as

three-storied building. The defendants in their written

statement, as well in their evidence consistently stated

that the value of the suit property was more than

Rs.50 lakhs. In the cross-examination of DW-1, it was not

brought out that value of the suit property was not more

than Rs.18 lakhs as contended by the plaintiff. DW-1 in

his cross-examination stated that a few years prior to

Ex.P-1, building was constructed in the suit property.

Hence, it is difficult to believe that they would agree to sell

the property worth more than Rs.50 lakhs at a price of

Rs.18 lakhs if really they intended to sell the same. It also

leads to an inference that it might not be executed with an

intention to sell the property.

24. Considering the pleadings, evidence and

documents, one can infer that Ex.P-1 was executed as a

- 18 -

NC: 2024:KHC:42486-DB

security document for the loan obtained by the

defendants.

25. The plaintiff has contended that defendants were

indebted to one C.Ashok Kumar to an extent of Rs.7 lakhs

and he was insisting the defendants to pay the said

amount. Therefore, a tripartite agreement was entered

into between plaintiff, defendants and said Ashok Kumar.

According to the said tripartite agreement, plaintiff had

undertaken to repay the loan amount of Rs.7 lakhs to

Ashok Kumar out of balance of sale consideration payable

to defendants. Defendants have stoutly disputed execution

of Ex.P-2 and the said case is made out by the plaintiff.

Even they contended that Ashok Kumar was not known to

them.

26. Plaintiff in his evidence has narrated the said

facts. In his cross-examination he stated that the said

Ashok Kumar is his cousin (son of elder brother of his

father). He was not residing in the suit property. The

defendants have denied the execution of tripartite

- 19 -

NC: 2024:KHC:42486-DB

agreement at Ex.P-2. It is an unregistered document.

Plaintiff has not explained as to why it was not registered.

It is in continuation of Ex.P-1 and executed on the next

day of registration of Ex.P-1. An additional amount of

Rs.7 lakhs was agreed to be paid to said Ashok Kumar out

of balance of sale consideration. That creates doubt about

execution of the said document. In the cross-examination,

DW-1 says that he and his brother signed on Exs.P-1 to P-

4. But on the basis of such stray admission, it cannot be

held that execution of Ex.P-2 is proved. Defendants

contend that at the time of payment of loan, plaintiff got

their signatures on promissory notes, stamp papers and

also obtained blank cheques containing their signatures as

collateral security documents. Looking to the said

contentions, much importance cannot be given to stray

admissions of DW-1. In the lengthy cross-examination of

DW-1, plaintiff could not get any other admissions/

answers to prove the execution of Ex.P-2.

- 20 -

NC: 2024:KHC:42486-DB

27. PW-2 in his cross-examination pleads ignorance

as to who prepared Ex.P-2. He stated that he had to put

his signature on Ex.P-2 at the instance of plaintiff. He

denied the suggestion that he, plaintiff and Ashok Kumar

created Ex.P-2. He says that he is the cousin of plaintiff.

He says that in his presence, Ashok Kumar and defendants

had financial transaction, which is not the case of plaintiff.

It is worth to note that both Ashok Kumar and PW-2 are

cousins of plaintiff who are signatories to Ex.P-2.

28. Ex.P-2 was said to be executed on 28.10.1998

i.e., on the next day of registration of Ex.P-1. The recitals

of Ex.P-2 do not have any reference to Ex.P-1 and

vice versa. The said C.Ashok Kumar is said to be the

resident of Mudigere as per Ex.P-2 and he is said to be a

coffee planter. It is not the case of the plaintiff that said

Ashok Kumar was a money lender and doing money

lending business at Bengaluru. It is not placed on record

as to how the defendants came in contact with said Ashok

Kumar. The defendants are running a small electrical

- 21 -

NC: 2024:KHC:42486-DB

shop in a portion of suit premises. The details of said loan

transactions were not placed on record. He lent amount

without any security. Ashok Kumar was not examined to

prove these facts.

29. It is also worth to note that, except the alleged

promissory notes, no documents were executed in favour

of Ashok Kumar as a security for loan of Rs.7 lakhs said to

be given to defendants. It is also not clear from the

evidence of PWs.1 and 2 or from the contents of plaint

averments or Ex.P-2 as to how the said Ashok Kumar

came to know about execution of Ex.P-1 just a day after

registration of Ex.P-1. There is no explanation. The

plaintiff has also not explained as to how he came to know

that defendants were liable to pay certain amount to said

Ashok Kumar. These facts create serious doubt about the

transaction between Ashok Kumar and defendants.

30. Plaintiff averred in the plaint that defendants had

borrowed a sum of Rs.7 lakhs from the said Ashok Kumar.

Defendants denied said facts. Therefore, there is a burden

- 22 -

NC: 2024:KHC:42486-DB

on the plaintiff and said Ashok Kumar to prove that

defendants had obtained loan of Rs.7 lakhs from Ashok

Kumar and executed promissory notes, receipts and

cheques. The best witness to prove these facts is the said

Ashok Kumar. He was not examined. Absolutely there is

no evidence in this regard. Defendants contend that

plaintiff at the time of lending amount of Rs.1 lakh, got

executed promissory notes and receipts. They also handed

over blank signed cheques as collateral security. The said

contentions cannot be ruled out. The plaintiff has

miserably failed to prove that defendants were indebted to

Ashok Kumar to an extent of Rs.7 lakhs. When the loan

itself is not proved, question of execution of the tripartite

agreement at Ex.P-2 does not arise at all.

31. It is also pertinent to note that in Ex.P-1, it is not

at all mentioned that defendants intended to sell the

property to clear-off the debt of Rs.7 lakhs with interest

borrowed from said Ashok Kumar. There was no hurdle to

mention that for repayment of the loan amount to Ashok

- 23 -

NC: 2024:KHC:42486-DB

Kumar, they were intending to sell the property. Even in

the cross-examination of DW-1, it was not brought out

that defendants informed Ashok Kumar of their intention

to sell the suit property to clear-off their debt payable to

Ashok Kumar. It also creates doubt about execution of

Ex.P-2.

32. Plaintiff examined PW-2 to prove Ex.P-2. PW-2

in his cross-examination pleads ignorance about Ex.P-2.

He also pleads ignorance as to who wrote the said

document, but he admits that he signed Ex.P-2 at the

instance of plaintiff. He says that he was asked by the

defendants to sign on Ex.P-2 and he also admits that he

was not related to defendants. He admits that he is cousin

of plaintiff; In that event, if at all he was asked to be

present while executing Ex.P-2, then it must be the

plaintiff and not the defendants who were not at all

connected with PW-2.

33. As already stated above, it is nobody's case that

Ashok Kumar gave money to the defendants in the

- 24 -

NC: 2024:KHC:42486-DB

presence of PW-2. But PW-2 says that he was present at

the time of financial transaction between plaintiff and

defendants. Admittedly, PW-1, PW-2 and said Ashok

Kumar are cousins. Said Ashok Kumar is resident of

Mudigere, which is far away place from Bengaluru.

Defendants say that said Ashok Kumar was unknown to

them, which appears to be believable. The said Ashok

Kumar has not entered the witness box and stated as to

how he came in contact with defendants or paid Rs.7 lakhs

to them without any security. All these facts create

serious doubt about the execution of Ex.P-2.

34. According to the case of the plaintiff, Rs.1 lakh

was given to defendants at the time of execution of

agreement of sale at Ex.P-1. The plaintiff further contends

that an amount of Rs.1 lakh was paid to defendants on

04.12.1998. Plaintiff has paid Rs.5 lakhs to Ashok Kumar

on 05.04.2001 under Ex.P-7 and Rs.3 lakhs on 20.12.2002

as per Ex.P-8 and Rs.3 lakhs on 17.01.2003 as per Ex.P-9,

in all he paid Rs.11 lakhs to Ashok Kumar. The amount

- 25 -

NC: 2024:KHC:42486-DB

due to Ashok Kumar was only Rs.7 lakhs as per the terms

of Ex.P-2. Then why did he pay Rs.11 lakhs to Ashok

Kumar is not explained by the plaintiff. For the sake of

discussion, even if we believe that Rs.4 lakhs paid by the

plaintiff to the said Ashok Kumar is towards interest, then

there must be an agreement or there must be some

mention in the plaint or evidence in this regard. But there

is no such evidence available on record.

35. According to plaintiff, the sale consideration was

Rs.18 lakhs. He paid Rs.2 lakhs to the defendants by way

of cheques and balance of sale consideration was

Rs.16 lakhs. Condition No.2 of Ex.P-2 reads as under :

" 2. That on discharge of the loan by the second party the liability of the second party to pay the rent and the liability of M/s.Mohan Industries Supplies to pay the rents in respect of the respective shop forming part of the schedule property shall abate. The parties of the third party shall not demand the rents from the said tenant ............."

36. In Ex.P-2, schedule of payment of loan to

Ashok Kumar is not stated. After repayment of amount to

- 26 -

NC: 2024:KHC:42486-DB

Ashok Kumar, PW-1 and his brother were not supposed to

pay rent to defendants. Still why was plaintiff waiting to

pay the balance amount to Ashok Kumar is not explained.

Part of amount was paid nearly three years after execution

of Ex.P-2. The second installment was paid four years and

third installment was paid after five years from the date of

execution of Ex.P-2. No liberty was given to plaintiff under

Ex.P-2 that he can pay the amount as and when he

desires. Both the parties were of the opinion that

defendants are liable to pay interest to Ashok Kumar and

according to the plaintiff, Rs.4 lakhs additional amount

was said to be paid to said Ashok Kumar. If really the said

amount of Rs.4 lakhs is towards interest, then it was paid

due to the default of the plaintiff in paying back the

amount to Ashok Kumar. Learned counsel for respondent

submits that plaintiff in collusion with others created

Ex.P-2 only to gulp the property of defendants, cannot be

ruled out.

- 27 -

NC: 2024:KHC:42486-DB

37. It is the case of the plaintiff that he was always

ready and willing to perform his part of the contract.

Plaintiff contends that Ex.P-1 was executed on 26.10.1998

and registered on 27.10.1998. The defendants agreed to

sell the property for improving their business and marriage

of their sister. It indicates that they were in dire need of

money. Admittedly, except two shops, remaining portion

of the entire suit building was in the possession of

defendants and part of the said property was in the

possession of the plaintiff and his brother. There is no

difficulty for evicting the other two tenants. During the

course of trial, it came in the evidence that the said

tenants have vacated the shops. This fact is very well

known to the plaintiff since he is residing in one of the

shops in the suit building. If really he is interested in

completing the sale transaction at the earliest, then

nothing prevented him from approaching the defendants

and calling upon them to execute the sale deed. But

plaintiff did not take any such initiation. Even he did not

send a notice calling upon the defendants to execute the

- 28 -

NC: 2024:KHC:42486-DB

sale deed in terms of Ex.P-1 and Ex.P-2. Providing a term

of five years to complete the sale transaction itself is

highly doubtful looking to the contentions of both the

parties. The said reasons indicate that the plaintiff was

not ready and willing to perform his part of the promise

if really we believe that Ex.P-1 was executed with an

intention to sell the property.

38. The learned trial Judge has considered all these

facts in detail by reproducing the evidence of the

witnesses and documents produced by both parties in the

impugned judgment and held that the plaintiff has utterly

failed to prove that Ex.P-1 was executed with an intention

to sell the suit property; and defendants have also

executed Ex.P-2, in continuation of Ex.P-1 and plaintiff

was always ready and willing to perform his part of the

contract. When all these facts are not proved by the

plaintiff, he is not entitled for equitable relief of specific

performance.

- 29 -

NC: 2024:KHC:42486-DB

39. The learned counsel for the appellant has relied

on the following judgments.

(1) In Jamila Begum (D) Thr. LRs. -vs- Shami

Mohd. (D) Thr. LRs. and another1, the Hon'ble Apex Court

observed that, "A registered document carries with it a

presumption that it was validly executed. It is for the

party challenging the genuineness of the transaction to

show that the transaction is not valid in law. There is a

presumption that a registered document is validly

executed. A registered document, therefore, prima facie

would be valid in law. The onus of proof, thus, would be

on a person who leads evidence to rebut the

presumption."

(2) In M.Ramalingam, deceased by LRs. -vs-

V.Subramanyam, deceased by LRs.2, the Madras High

Court held that " ........... the part payment of consideration

and the execution of Ex.A1 agreement. It is pertinent to

point out that Ex.A1 agreement was also registered.

AIR 2019 SC 72

AIR 2003 MADRAS 305

- 30 -

NC: 2024:KHC:42486-DB

Though the plaintiff was cross examined in length, not

even one circumstance was brought forth to disbelieve or

discredit the evidence of the plaintiff. In view of the

admission of the execution of the said document along

with the receipt of Rs.35,000/- by the defendant coupled

with the evidence of P.W.1 and also the clear and

unambiguous terms and recitals found therein, the Court

is of the considered view that no more proof could be

expected to prove the document."

(3) In P.S. Ranakrishna Reddy -vs- M.K.

Bhagyalakshmi and another3, the Hon'ble Apex Court in

Paragraphs 11 and 12 has held as under :

" 11. The agreement in question has been described as an agreement for sale. The appellant admittedly was owner of the property. The agreement shows that there had been negotiations between the parties as a result whereof the respondent herein had offered to buy and the appellant had agreed to sell the said property for a sum of Rs.45,000. The terms and conditions

(2007) 10 SCC 231

- 31 -

NC: 2024:KHC:42486-DB

stipulated therein were arrived at as a result of the negotiations between the parties.

12. No part of the agreement supports the contention of Mr Chandrashekhar that the same was not meant to be acted upon. It was signed by the parties. Two witnesses who had attested the signature of the parties to the agreement were examined before the trial court. It may be that despite the said agreement, Respondent 1 was allowed to continue to remain in possession of the premises in question as a tenant and not in part performance of the said agreement for sale, but it was not necessary for the parties to adopt the latter course only. The parties, on a plain reading of the agreement, apparently intended to continue their relationship as landlord and tenant till a regular deed of sale was executed."

40. In the present case, as discussed in the above

paragraphs, execution of Ex.P-1 is highly doubtful.

Contents of Ex.P-1 as well as in the cross-examination of

PW-1, it is stated that the said document was executed for

obtaining financial assistance to improve the business.

Admittedly the defendants are running business in a shop

situated in the suit property. Defendants admit that they

- 32 -

NC: 2024:KHC:42486-DB

took loan of Rs.1 lakh by executing Ex.P-1 and Rs.1 lakh

was paid under Ex.P-1. In the cross-examination of DW-1

it was not brought out that Ex.P-1 was executed with a

sole intention to sell the suit property. Serious doubt is

clouded on Ex.P-1 as well as on Ex.P-2. The payment of

part sale consideration as stated in the plaint is also

doubtful in view of non-examination of Ashok Kumar.

Under these circumstances, merely Ex.P-1 is registered,

does not mean that it shall be accepted as a gospel truth.

In the above referred judgments, the plaintiff therein

was able to establish the execution of agreement of sale.

Considering the same, the Hon'ble Apex Court did not

accept the defence of the defendants contrary to the

registered document. Therefore, the aforesaid judgments

will not help the plaintiff/appellant in the present case in

any way.

(4) The judgment of Hon'ble Apex Court in Sughar

Singh -vs- Hari Singh (Dead) Through LRs. and others4

AIR 2021 SC 5581

- 33 -

NC: 2024:KHC:42486-DB

relied upon by the learned counsel for the appellant

pertains to readiness and willingness to perform the

contract.

41. Learned counsel for the respondents/defendants

relied upon a judgment of Division Bench of this court in

the case of Sri Punny Akat Philip Raju, since dead by his

LRs. -vs- Sri Dinesh Reddy5, wherein it is held as under :

" Mere stepping into the witness box and saying on oath that he is ready with the balance sale consideration or that he is going to borrow money from any financial institution or that he has got sufficient funds in his Bank accounts or that he has kept money in Fixed Deposit, without that oral evidence being supported by documentary evidence will not prove the plaintiff's readiness to pay the balance sale consideration. It is immaterial whether such oral evidence is challenged in cross- examination or not. The plaintiff has to prove to the satisfaction of the Court that he possessed the requisite funds. He has to produce such documentary evidence, which would enable the Court to come to the conclusion that plaintiff is ready with the requisite balance sale consideration to complete

ILR 2016 KAR 2252

- 34 -

NC: 2024:KHC:42486-DB

the sale transaction. If no evidence is adduced in this regard by way of documentary evidence, no prudent man would come to the conclusion that the person has proved the possession of funds. In the absence of any such documentary evidence being produced, it is a case of plaintiff's case being not proved. Plaintiff cannot expect the Court to pass a decree for specific performance of a contract of sale when the plaintiff has not proved his readiness to perform his part of the contract."

42. In the instant case, the readiness and willingness

of the plaintiff to perform the terms of the agreement of

sale are discussed in the aforesaid paras. The first

payment of Rs.1 lakh, which is admitted, was made on

26.10.1998. The remaining payments stated in the plaint

are not proved. The plaintiff knew that one of the tenants

who occupied the suit property had vacated the suit

premises. He never issued a notice calling upon the

defendants to execute the sale deed for the reasons best

known to him. During the course of trial, he had not

proved that he had sufficient source of income to pay the

balance amount of sale consideration to get the registered

- 35 -

NC: 2024:KHC:42486-DB

sale deed even if it is believed that defendants have

executed an agreement of sale. Payments made to Ashok

Kumar as contended by PW-1 shows that he had no funds

to pay lumpsum amount to defendants. Therefore, merely

stating a fact in the pleading and evidence that plaintiff

was always ready and willing to perform his part of the

contract is not sufficient. Plaintiff has utterly failed to

prove that he was always ready and willing to perform his

part of the contract to get executed the registered sale

deed.

43. The suit is for the specific performance of the

contract. Therefore, the court also has to consider

hardship. The defendants in the written statement have

contended about their hardship. It was not rebutted by

the plaintiff. Certain facts are not in dispute. The

defendant No.1 is running an electrical shop in a portion of

suit premises. Both the defendants are residing in the

very same property. Defendant No.2 has been serving in

the shop of the plaintiff. It is not brought out that they

- 36 -

NC: 2024:KHC:42486-DB

had any other source of income except income earned

from the salary as well as business of defendant No.1. If

the defendants are directed to execute the sale deed

believing that they have executed Ex.P-1 with an intention

to sell the property, then defendants will be put to serious

hardship. They would be without business as well as

residence. In addition to that, defendants by oral evidence

have shown that the value of the suit property was much

more than what is stated in Ex.P-1. Looking to the

location of the land as stated in the pleadings and

construction of the building thereon, indicates that the suit

property is worth more than the value as stated in Ex.P-1.

If the defendants are directed to sell the property after

lapse of about 26 years from the date of execution of

Ex.P-1, then they would be put to much more hardship.

On the contrary, the plaintiff was not able to prove the

payment of Rs.12 lakhs as mentioned in Ex.P-2, Exs.P-7

to P-9 and the cheque dated 04.12.1998 for Rs.1 lakh.

As such, the amount of Rs.1 lakh paid by the plaintiff to

the defendants could be ordered to be paid with

- 37 -

NC: 2024:KHC:42486-DB

reasonable interest, which can compensate the rights of

the plaintiff for recovery of the amount as the defendants

are put to more hardship than the plaintiff.

44. Though the plaintiff has contended that he gave

a cheque for Rs.1 lakh, dated 04.12.1998 and the amount

was withdrawn by the defendants, but plaintiff has not

produced any documents to corroborate the same.

45. It is true that plaintiff did not seek for an

alternative relief of refund of earnest money. The relief of

specific performance is an equitable relief. The defendants

have not disputed that they have received Rs.1 lakh at the

time of execution of Ex.P-1. Therefore, though the relief

of refund of earnest money of Rs.1 lakh was not prayed by

the plaintiff, to meet the ends of justice, it is necessary to

direct the defendants to refund the said amount of Rs.1

lakh to the plaintiff with reasonable interest. Looking to

the facts and circumstances of the case and the purpose

for which the defendants have obtained loan from the

plaintiff, we feel it proper to direct the defendants to pay

- 38 -

NC: 2024:KHC:42486-DB

interest at the rate of 10% p.a. on Rs.1 lakh from the date

of filing of the suit till its realization. To that extent,

decree needs modification.

46. In view of the aforesaid discussion, we pass the

following:

ORDER

The Appeal is allowed in-part.

The judgment and decree dated 29.01.2016, passed

by the learned XI Addl. City Civil Judge, Bengaluru, in

O.S.No.7688/2003, is modified. The dismissal of the suit

for specific performance is confirmed. Defendants/

respondents are directed to refund the earnest money of

Rs.1 lakh to the plaintiff with future interest at the rate of

10% p.a. from the date of suit till its realization.